Construction of China’s next-generation 5G mobile network could be pushed back due to technical constraints and signs of a more “rational view” by the government, according to analysts at US investment bank Jefferies.

Analysts cut forecasts for China’s overall 5G capital expenditures (capex) by 8% or RMB 57 billion ($8.49) in 2020 to 2022 and pushed expectations for peak capex out to 2023 from 2021 to 2022 in a recent report that re-evaluates 5G timing and rollout following a critical development in December. The government allocated radio frequency spectrum to China’s three telecommunications companies, enabling final trials before wide commercial implementation in 2020, spurring a round of financial re-assessments. Other factors influencing the forecasts changes include recent 2G re-farming indicators and signs of moderating mobile data price pressure from the government.

While the Ministry of Industry and Information Technology (MIIT) placed “accelerating 5G” as a top priority, the rollout will likely not happen as quickly as expected due to “…the likely lack of a range of affordable 5G handsets and attractive applications (both consumer and industrial),” said equity analyst Edison Lee in the report.

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Nicole Jao

Nicole Jao is a reporter based in Beijing. She’s passionate about emerging trends, news, and stories of human interest within the world of technology. Connect with her on Twitter or via email: nicole.jao.iting@gmail.com.